LOI -- Sample Seller Note Terms/Language

searcher profile

September 16, 2022

by a searcher from Northwestern University - Kellogg School of Management in Redwood City, CA, USA

Hi All,

I am looking for sample/template language for a contingent seller note to include in an LOI that is compatible with SBA financing. I understand the high level requirements but haven't seen any sample LOI's with contingency/forgiveness terms.

Thank you.
Mark

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commentor profile
Reply by a professional
in Boca Raton, FL, USA
It is a complete myth that LOI's are non -binding. They can be, but not always. There can be terms in it that in fact are binding, depends upon the language. Here's the rule for any business buyer - any legal document you plan on submitting or signing, have your attorney review it regardless of the deal size. If you are so inclined to start drafting legal documents yourself; which on its own is a crazy idea, unless you are using a template your attorney has previously provided for you and there are absolutely no other contingencies to be added. For example, use the template in lesson # 19 of our program How To Buy A Good Business At A Great Price at diomo.com with the appropriate contingencies subject to legal review.
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Reply by a searcher
in Chicago, IL, USA
I know “just make it up” isn’t a great idea, but the reality is that an LOI is non-binding and most effective to get them under a###-###-#### day exclusivity period so you can dig in without them shopping around.

I always write LOIs in simple and plain language, if that helps.
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